now, the president and inspector general of amtrak and the united transportation union testified before congress. they discussed recovering $20 million in overpayments and the company's restructuring plan. from the house transportation and infrastructure committee. this is about two hours. >> good morning. i would like to call this hearing of the house transportation infrastructure committee to order. >> we are pleased to conduct this full committee oversight hearing on amtrak and today -- the title of today's hearing is getting back on track, a review of amtrak's structural reorganization. so welcome and we'll have -- we have one panel of witnesses

today. and the order of business will be that i will start with an opening statement, provide some background, and will yield to mr. cummings this morning, and other members who wish to be heard, then we'll turn to our witnesses. we'll hear from all of them and then go to questions. pleased to welcome, again, everyone this morning. now, this is one of a number, we have actually held fourth in a series of full committee oversight hearings on amtrak and u.s. passenger rail policy in the united states. we actually have two more scheduled. one will be on thursday, december 3, and that will focus on high speed and inner city passenger rail grant program. and then we'll have the final hearing on this important subject. thursday, the 13th of december, and that will be on the

northeast corridor. ironically yesterday i was back in new york city actually looking at some of the flood and storm damage. many of the transportation infrastructure facilities were adversely impacted, huge amount of damage. they have incredible new york city is resilient, and how well they are coming back. i think they got about 95% of their transit operations, rail was particularly hit. almost all of east side lower manhattan tunnels flooded, and just think of the massive effort put forward to get those trains running. they probably move about 20% of all passengers in the world in new york city. and a hit like that was incredible. i understand mayor bloomberg, we met with yesterday, will be in town today, and we had discussions yesterday about fema, which our committee oversees and also transportation and

infrastructure that was hurt. that may be the subject of additional scrutiny by the committee, but today, again, we are focused on looking particularly at amtrak's structural organization. i might also recall that with the last hearing what we'll be doing on the northeast corridor, our very first hearing was on january 27, 2011, when i became chair of the full committee. we did that in grand central terminal where we focused on the future of high speed rail in the northeast corridor, and our last hearing on december 13 we'll focus on that same and the progress we have made since that hearing. it's kind of interesting how you come about choosing topics for some of these hearings. after reflect a moment, a lot of people when they go home, maybe they go to bed, maybe they count sheep or read a novel. i like to tuck copies of different trade publications at my bedside and was reading in awe. it had to be after august,

because this is august, 2012, progressive railroading had a great article which featured -- the title is "at long last, a longer view." it focuses primarily on passenger rail service and amtrak. i thought it was quite interesting, particularly quite interesting because it outlined some of the work that amtrak had been doing regarding its reorganization, its structural management, and the -- responding to some of the previous studies that called for more accountability, more responsibility, and the way amtrak is structured. that led me to say we really need -- the committee really needed to look at where we are in this whole process and where we have been. for just a minute to tell you where we have been, we have had

a g.a.o. study in 2005 that asked for amtrak to develop a strategic plan that could clearly link the organization's management to overall corporate goals. amtrak is a corporation. i was intrigued by a comment that joe boardman, the president and c.e.o., made in this article when he pledged in the article, and i take his quote from the article, to run this company more as a business and less as a government entity.

quite inspiring goal and something we have been trying to achieve from this committee. he set some of the bar and, again, back to 2005, reviews of amtrak have called for improvement, again, in its organization and management strategy. in 2010, the i.g. of amtrak released another report and as a result of that 2010 report, in november of 2011 amtrak released their five year strategic plan with corporate goals and organization

structure, targets that they intend to use to create more transparency and accountability. and that's what we'll focus a great deal on today is where they are in that process, how they have come along. we'll hear from the head of amtrak, mr. boardman, we'll hear from the inspector general, and we'll also hear from a representative of workers and labor and see how they assess that progress. the plan, the strategic plan that's now under way hopefully we'll hear to be fully implemented by next year, we'll get exact update, again, from mr. boardman and others. the plan that was devised takes amtrak and organizes it into six business lines, a vice

president or manager of business, and we'll see how that has come to pass and how that organization is -- reorganization is proceeding. and the purpose of that is to establish performance goals that are outlined in the strategic plan so that profits and losses can be addressed, and also accounted for. past amtrak managers have not, unfortunately, been held accountable for what's happened in their departments, and that's not my evaluation, it's the evaluation of several of these studies. also in the past, there have been amtrak attempted reorganizations without clear

goals, unfortunately. i hope to better understand amtrak's strategic plans, its corporate goals, and specific progress on its reorganization. and also learn how it will improve performance, accountability, and cost savings. i approach this hearing with a very open mind. amtrak's strategic plan is very important. i know it requires a transformative approach from what they have done in the past. the not just a rearranging chairs on the deck of the titanic. we want to make certain that there is a positive progress. from a fiscal standpoint and everybody's focused on the fiscal cliff and sometimes people give me a hard time for focusing on amtrak, but we have this past year put $1.4 billion into amtrak and government subsidies.

almost half a billion in operating subsidies and close to $1 billion in some of the capital improvements. over the years that's -- that commitment's remained pretty much the same. we do have a responsibility with taxpayer dollars to make certain that this operation, which is highly subsidized, and we did do a hearing on that one of the past three, four hearings we did, maybe they can put that on the board, is the comparison of federal subsidies, the average cost of my ticket coming back from new york, government subsidized the average cost of $46.33. fortunately, and i read through the report pretty carefully, amtrak has made some progress in acela, so the loss isn't that great for acela, but this is the average ticket subsidy simply by taking the 29 million passengers or 28 if it was last year and dividing it by the underwriting subsidy. other modes of city buses, 10 cents, mass transit, 95 cents, aviation, $4.28.

and that was highlighted in a hearing that we -- previous hearing that we did. we are trying to bring that subsidization for the system down. let me say in closing, i went through the inspector general's report last night and i do want to hear at least the report that he's giving, i'm not sure how much of this he'll address, but seven of the nine board members, we had some reorganization of the board of directors, we now have seven of the nine board members onboard. i also want to know about key personnel.

we talked about hiring vice presidents and managers over some of these sectors, and that, as mentioned in the inspector general's report. and finally, that the comment that the inspector general made that the company is clearly in the early stages of implementing many of these restructuring initiatives, and he further said that recent work shows the sustaining effectively implementing these initiatives has the potential to significantly reduce amtrak's reliance on federal support. and that's the goal of this. it's not just to beat up amtrak, although sometimes we do become very harsh critics when money is lost or we see lack of progress in some areas. but our goal is to reduce the federal reliance -- reliance on federal support and that's one of the objectives of this hearing, in addition to finding the specifics on the progress of their structural organization and reorganization.

i'll introduce our witnesses shortly, but let me yield to mr. cummings who is serving as ranking member at this point. >> thank you very much, mr. chairman. it is certainly my pleasure to be here. i want to thank you for calling this hearing. mr. chairman, quite often our federal employees had unseen, unnoticed, unappreciated, and unapplauded. in my capacity as the ranking member of the oversight and government reform committee, i hear so much criticism of our federal employees and government employees in general, and i want to take a moment here before i even start to thank joyce rose for her 25 years of public service on behalf of this committee and on behalf of this side of the aisle. i know all of us feel this way. [applause]

this is joyce's more than likely -- it is her last hearing, and she has always worked fairly with all of our members and with our staff on this side, she has done everything in her power to make sure that not only the congress is served well, but that the country is served well. and so i -- we hate to lose her, but we know as someone said to me, joyce, and i listened to this in a sermon by p.d. jakes not too long ago. he said his son came to him, his son is a singer and he was about to go off to college, and his son said, daddy, i'm not sure this is a thing for me. singers may not make a lot of money.

it may not be the right thing for me. and his father went up to him and he said, son, if it's not the thing, it's the thing that will lead you to the thing. and so this has been -- this transportation committee has been a part of your journey. and we hope that it has been one that has been most meaningful. and we really thank god for allowing your destiny to lead you to us and for our destiny to lead us to you. so we wish you well in your new endeavors as the president, that's quite -- went from staff person to president of operation lifesaver, which has the important mission of educating the public on grade crossing safety. may god bless you and thank you so much for your service. of course.

[applause] >> if gentleman will yield for just a second. again there's probably no higher tribute than to have the other side of the aisle lead with the praise of your service to the committee, to the congress, and to the country. mr. cummings and i know that you cannot be successful in our position without great staff. and certainly you have worked long and hard, 12 years for the committee, 25 years in congress. a quarter of a century of commitment to public service. i don't think there's anyone that deals with the rail or transit issues in the nation that doesn't know of joyce rose and her commitment to helping everyone.

we hadn't passed a passenger rail re-authorization in 11 years. i was the ranking member and joyce worked with myself, mr. oberstar, and we had great cooperation from both sides of the aisle. we passed the legislation called priia, passenger rail investment. authorization for passenger rail, which is right now the guideline we go by and the authorization. if it wasn't for her dedication, commitment, and incredible knowledge. i just think of the knowledge that will be lost when she leaves her position, we couldn't have achieved that. so, joyce, on behalf of the majority side, which we have

had the privilege to have you working with us, and again from mr. cummings and the minority side, we are just eternally grateful. and we are paying a little special tribute to you today. and thank you again for your service. god bless you. >> i thank you for scheduling today's hearing. following the release in 2005 by the g.a.o. of a report entitled "amtrak management systemic problems require actions to improve efficiency effectiveness, accountability" that was the name of the report, i was asked by then ranking member oberstar to serve as the lead democrat on the special working group convened by this committee to evaluate that report's findings and make recommendations on subsequent action. certainly amtrak was facing challenges at that time, but among other observations, the democratic members of the working group noted in our view that amtrak, quote, faces

difficulties in implementing long range strategic plans because of great uncertainty regarding its federal funding each year, end of quote. during that era, amtrak faced repeated proposals to cut or eliminate the federal funding provided to it. obviously that made it difficult for amtrak's leadership to focus solely on operating the company or on developing long-term goals and performance benchmarks. we hear a lot in the congress about uncertainty. so subsequently, under chairman oberstar's leadership, congress enacted the passenger rail investment improvement act and recommitted to the value of the service amtrak provides. this commitment was expanded by president obama in the comments to the american recovery and reinvestment act, which provided funding to begin many of the capital projects that had been tabled due to years of

inadequate federal funding. it is clear that the investments we have made in amtrak are supported by the traveling public. fiscal year 2012, amtrak achieved the highest ridership levels in its history. that's major news. major. more than 31 million passengers took amtrak in this fiscal year and the service appears poised to continue to grow. against this record of success, my colleagues on the other side of the aisle believe amtrak needs to get back on track as the title of this hearing suggests. it is only because they have, once again, been doing all they could do to try to derail the service. in fact, the republican presidential platform called

explicitly for amtrak's elimination. fortunately that misguided platform was resoundingly rejected by the american people who have instead supported the president's call to move forward by implementing policies that will expand investments in our nation and support our continued economic recovery. this company must stay on track and focus on its core mission of serving our nation's mobility needs as safely, securely, and efficiently as possible. i'm very encouraged by the actions mr. boardman has taken to develop a strategic plan and to introduce an organizational structure that supports the implementation of that plan and increases accountability at all levels of the organization. i might note that when the chairman was talking about

subsidies, mr. boardman, i don't think it included amtrak's commuter rail passengers. the actual subsidy is about $5 per passenger, and i would ask in your opening statement you address that so we will be clear on what that subsidy is. i don't want any confusion about that, because i don't want people watching this think it is something it is not. that said, while we must conduct a thorough oversight over amtrak as over all entities receiving federal funding, our committee has now held seven hearings at the full and subcommittee levels in the 112th congress on amtrak, and today we are convening to examine a strategic plan that has not even been economy implemented. appropriate oversight does not require micromanagement of all facets of an entity's operations, thus while i look forward to the testimony of today's witnesses, i hope we will use this hearing to identify ways we can support

the continued success of amtrak, enable it to grow, to meet the increased passenger demands. we should also seek ways to support continued implementation of the reforms mr. boardman has proposed, and give him and his leadership team the space they need to fully implement their plans rather than requiring them to return to the hill every few weeks. so with that, mr. chairman, i yield back and i want to thank you for yielding. >> i thank the gentleman. are there others who -- anyone on this side? >> first of all i'd like to thank chairman mica and ranking members brown and cummings for holding this hearing today which focuses on it's noted that amtrak has a record of 30.2 million passengers. traveling on amtrak and full year 2011.

we would have seen head lines like amtrak has record of low ridership. instead amtrak's ridership is booming this year with 11 consecutive monthly rider ship records. in each month of this fiscal year, amtrak has posted the highest total ever for that particular month with the final month of september also expected to be a new record. >> a 25% cut in funding and even more alarming not having a vision for high-speed rail network. these actions are detrimental to the transportation opportunities for all americans. the alternative to build more roads by more cars and consume more oil should not be our only solution.

in fact, according to d.o.t., in comparison, in 1958 through 2012, the united states has invested $1.4 trillion in our nation's highways, $538 billion in aviation, $266 billion in transit, and yet amtrak, which was created in 1971, has received a small fraction of that funding at $41 billion.

when you consider that and compare it to the oil and gas industry, which received $441 billion in federal subsidies, although more than half of those have been available to the energy sector. we have spent to bring that together, we spent more in one year with the oil and gas and energy companies and their industry than we have spent in the entire life of the program of amtrak. clearly there seems to be an imbalance and it's not one that should be continued. regarding the vision of high speed rail, the amtrak acela service is one of those alternatives and though it may only achieve the speeds of average of 83 miles per hour,

along the n.e.c., surely that is significantly better than the long delays in crawling in our interstate systems that we have. this committee should continue the role as it always has to facilitate the development of critical infrastructure and the continuation of one of america's greatest assets, and that's passenger rail. i want to thank all the witnesses before the committee today. and i look forward to hearing your testimony about how the reorganization of amtrak can make it an even greater service to the american public. with that i yield back. >> i thank the gentlelady. recognize mrs. napolitano. >> thank you, mr. chairman. may i associate myself with the remarks from ms. richardson, but i especially want to thank congresswoman, ranking member brown and elijah cummings for bringing this issue along with you. amtrak is extremely important to california. we have three of the top five busiest corridors are in our california area. two of them are supported totally by the state, but the shoreliner is not -- i see there are some cuts coming through and i'm going to be

looking at very closely because it has $2.8 million ridership. all three are state support services program, and as has been stated, the vitality must be supported. for the straight sported services program. it's important to all states, especially california, we are a donor state. because it gives more options to commuters and many inner city travelers while reducing highway congestion pollution. california has been at the forefront of reduction of pollution in cars and several other areas. the california transportation commission is voicing their opinion on -- i talked to transportation secretary brian kelly, deputy secretary brian annis, and rail division manager on how they view amtrak's work with california and cal trans. they are concerned with changes

to state support services program, section 209 of the passenger rail investment and improvement act, the priia. that forces the state of california to pay $20 million that are going to be taken out of that budget for them. it runs along the border of my area which is the alameda corridor east which is a train transportation that brings in to the rest of the nation. we are watching the reorganization of amtrak, making sure it doesn't hinder any state partnerships. these are critical because they are the ones who will in the end work with the local communities to ensure that we get more people to utilize it. we are pleased that the reorg has created an executive level position of general manager. i look forward to meeting that

individual and working with him. it's a very positive step and the states provide 50% of the revenues to amtrak. we must have a senior amtrak level position to work with state on their programs. and this is especially important, section 209 of priia negatively impacts states, especially in california. i also want to add my two cents to ranking member elijah cummings' statement on the employees who run amtrak. they have done a beautiful job. i hope they will continue and we will continue to work with them to ensure that not only do they provide good service, but that they also are recognized for the work they do for our ridership. with that i yield back the balance of my time and i thank the chair. >> i thank the gentlelady. ms. johnson. >> thank you very much. mr. chairman and ranking member. my remarks are very brief.

in october, 2005, g.a.o. issued a report to then chairman young for lack of a strategic plan and the report identified that without a comprehensive corporate mission, amtrak's business practices were lacking and could not ensure consistent and improved corporate performance. in august, 2010, the amtrak inspector general's office released an evaluation report of amtrak's strategic planning and set forth key elements necessary for an effective strategic planning process. the report formed the basis for amtrak's november, 2011, strategic plan for fiscal year 2011 through 2015. while the re-authorization is not yet fully complete, there

appears to be significant in performance and accountability improvements, and i look forward to the testimony. it seems to me that they are doing exactly as we have desired. thank you. i yield back. >> i thank the gentlelady. others seek recognition? if not, what we'll do is turn now to our three witnesses and welcome them again. our first witness, and i'll recognize him at this time, is the president and c.e.o. of amtrak, mr. joe boardman. thank you. welcome and you are recognized. >> thank you, mr. chairman, mr. cummings, members. i appreciate being here today. and joyce, i'll be on your board so the questions will come from me for the future for o.l.i., but i'm glad that you are there-durable' bring the energy to a very important problem of safety for railroads. i appreciate the work you have done here.

angela cody, sitting over in the corner, mr. chairman, who is the one who wrote that article, and i have already blamed her for this hearing this morning, she's already asked me for another interview, and i understand now no good deed goes unpunished in this process. what aid like to really start with and talk about this morning is that i have been an amtrak customer as a state commissioner of transportation and even before that and i was thinking about this in my own company, i used amtrak as the backbone of what we provided in transportation to the social service agencies where we had contracts, because part of the high cost for social service agencies was to transport especially a long distance, for example in new york from the central part of the state to buffalo, to the cancer center, instead of using an ambulance or a very high cost, we would

transfer people to amtrak at utica or rome or syracuse in some way to get to the buffalo center. so amtrak was right to begin with the answer to part of the reduction in cost savings that the federal government is interested in and the state governments are interested in across the country. and also contributes then to amtrak's revenue as a result of that. so as a customer, i'm focused on customers, and what is it that a customer really needs to ride amtrak or any other service for the future? and so when you look at a transformation of a major corporation, which amtrak is, you really had to spend a lot more time in the diagnosis than they did in the execution. so what you saw for the first year or two was looking at

amtrak as an organization first, how do they do their jobs and should they be done differently for the future? and what you found was in a lot of the past reorganizations, a lot of box moving in the organizations, but not a lot of understanding of what the women and men at amtrak really accomplished to deliver the services that we were really looking for. so some things were good and some weren't. but now we have some results of what we are doing and we made some of these changes on an incremental basis as we have gone along. for example, we knew that a foundation of this had to be why the heck didn't amtrak have any labor contract agreements for over eight years? and why would -- why did we have that kind of a culture at amtrak? my perspective was that you needed to bring that group of people together in a very different way for the future so the reorganization began almost

immediately in terms of understanding the strength of this agency was in its men and women. the work that they did and how they work with us. or with management or not with management. and you need add way to get in there. and the common thread of what a customer wants and what an employer wants and what an employee wants is safety. so we went in under the basis of a safe is safer program which is a different way of looking at safety than the railroad industry had looked at generally in the past. the way i learned about that was from federal employees. those federal employees were part of the federal railroad administration and they saw that the level of safety got to a certain place and didn't go any lower. it had to change the way we were looking at safety. there's been that recognition just in the past year by the freight industry as well. it's a different structure

today of the awards for safety because what we really need is a behavioral based safety program. which is what amtrak now has in safe to safer. but it also brought together people to work in collaboration to resolve problems. you couldn't resolve problems in amtrak without that kind of collaboration with the women and men that did that work. amtrak's ninth ridership record in the last 10 years, we have actually reduced our operating subsidy. there is a difference in our view in operating subsidy and capital subsidy. amtrak in its first iteration in 1971 was taking over the losing passenger railroad system from the private freight industry. and it did not include the northeast corridor. it only included the long distance trains across this nation. and congress contemplated as did the executive side at that

time that subsidies would be needed, although they expected that there would be some way that a profit would be made. the freight railroads were relieved of a great responsibility, but it wasn't until 1976 that you really got the northeast corridor and you had a different structure at that point in time. mr. cummings, to address what you asked early on, is when you really look at operating assistance, we cover 79% of our fare box in the company as a whole. but on the northeast corridor, we cover more than 100% of our operating cost. and we use part of that revenue to go back to subsidize the long distance trains because we know that the long distance trains are an intricate part of our network of mobility across this country. so in fact there is not a

subsidy to a passenger on the amtrak corridor except when you add capital assistance. and i understand that. and the need for capital assistance is so great on the northeast corridor that that subsidy need will continue for a long time. as recently exposed in these storm sandy where we lost one of our substations because we didn't make the investment, we as a nation, as a region, didn't make the investment to make sure that the water didn't come into that substation and end the ability for us to have the level of service into the penn station in new york city. because those gates were so old. and it was scheduled to get done as a part of the art program, and it's now scheduled to be done as a part of the gateway program which is a

discussion that this body needs to have for the future about how do we make those investments in infrastructure? and i'm hearing that today in many areas. so really a subsidized cost is really about the long distance trains where the business model doesn't work the same as the level of service that there is along the northeast corridor and the need to connect that service. but we had to be careful coming in to reorganize amtrak. you have to find out and -- whether it was the g.a.o. report or whether it was the i.g. report, we followed the i.g. structure in terms of developing a strategic plan. there's no question about that. and i think that mr. alves will say that in this process, and when we did that we knew other elements of this had to occur as the g.a.o. pointed out in its metrics.

one of the things that i feel and felt that i brought to this process was, this was most of my career going into failing bus systems and bringing them back. and delivering a different structure across the country for passenger transportation. while rail is a little bit different, it's still very similar in many ways. it's not about the boxes. it's about understanding what it is that we have to get done. and then making sure that we are able to measure, have goals that they are clear, and we can measure them to see if they are successful. broadly we see that in ridership. broadly we see that in reducing federal funds. but our goals need to be much more specific so that we can hold our selves accountable and employees accountable for what needs to be done to improve service to the customer.

because the customer is the major focus of what this company needs to be all about. it's not about moving trains. it's about moving people. and that's the foundation. and the people that you move have to be people that feel that they are fairly dealt with within the company. so the foundation of what that's about in our reorganization is a commitment to the values, integrity, spirit of service, desire to improve respect, entrepreneurial spirit, humility knowing that why we have heroic acts we don't have heroes. we need everybody, woman and man, to deliver what we are really looking for. it isn't about the c.e.o. it isn't about the union leader. it's about all that work in a collaborative fashion. then we finally need -- not

finally but perhaps sometimes first of all, forgiveness in the process. because what you are looking for are people making decisions and they have to make them every single day. sometimes they don't make the right one. and they need to be forgiven when they have done it in the best way that they can, and future, and that's what we look for is that learning. i don't have a time clock here in front of me, it's not working. >> we gave you double so far. >> i can step back and answer questions for the future. we do have a strategic plan. we do have an organizational process. it's different than it was in the past. it's a matrix organization rather than a siloed organization. and it isn't complete. in some ways as i listen to folks i said, it's never going to be completely complete because things change.

surexample, i'm not so right this minute that we will hire a general manager of commuter services, because our commuter service has gone down and been subject of a previous hearing, that may not be the best way to deliver that for the future. we may rethink that and that's one we have not filled at this time. we have filled the general manager for long distance. we filled the general manager for the northeast. we filled the general manager for state supported services. i'll stop. >> thank you. we'll get back to you on questions. you have covered a wide range of what we are interested in hearing about, but we'll turn now to the inspector general, mr. alves, you're welcome. glad to have you back here. thank you. >> good morning, chairman mica, mr. cummings, members of the committee. thank you for the opportunity to discuss how our reports have

supported or complemented amtrak's ongoing efforts to operate more effectively by focusing on customers and the bottom line. in line with the hearings' focus on amtrak's ongoing reorganization, my testimony will center on reports related to improving amtrak's operational and financial performance. before i address those reports, i would like to highlight the fact that our work generally supports ongoing amtrak improvement initiatives. over the last couple of years, both the board of directors and amtrak management have been focused on improving amtrak's operational, financial, and customer service performance. to illustrate, because the board now has seven of the nine members authorized by priia, it has been able to reconstitute two important board committees, the audit and finance committee

anti-personnel committee. this has helped the board to provide stronger oversight of management activities. similarly, amtrak management has taken key actions, including issuing a strategic plan that meets best practice guidelines, and provides a road map to help amtrak become more focused on customers and the bottom line. the reorganization initiative that is the focus of today's hearing is directly linked to the strategic plan's commitment to organize around lines of business. turning to our reports, generally amtrak has taken positive action on our recommendations. for example, our august, 2010 report found that although amtrak had made various attempts to develop a strategic plan, none had been successful. the need for amtrak to have a meaningful strategic plan was first identified in a 2005 g.a.o. report. we recommended that amtrak

develop a strategic plan utilizing a process that incorporates best practices for strategic planning. amtrak agreed and the plan was issued in november of 2011. amtrak's board of directors also requested that we review amtrak's risk management processes. our march, 2012 report showed that amtrak did not have a systematic enterprise wide framework for identifying, analyzing, and managing risks. the board chairman and the president and c.e.o. responded that once they understood the commitment required they would provide guidance to management about amtrak's plans to implement a risk management framework. we have discussed our views on the way forward with the board, and understand that the board is in the process of determining how it will address this issue. starting in 2009, we issued a series of reports on human capital management.

our july, 2011 report found that only limited progress had been made in implementing our prior recommendations. in response, mr. boardman agreed to make improved human capital management a priority. since then amtrak hired a new chief human capital officer and he has developed and is implementing an action plan to address our recommendations. we also issued two reports on amtrak's food and beverage program. in september, 2012, we reported that food and beverage activities were being carried out by two departments and their activities were not well coordinated. management agreed to consolidate the two and did so on october 1, 2012. since 1995, we have issued a series of reports identifying more $83 million in overpayments on inaccurate invoices from host railroads. amtrak agreed to improve its invoice review process and has

done so. in addition, this year amtrak recovered over $20 million of overpayments we had previously identified. in conclusion, the company is focused on operating more like a profit making business. it is in the early stages of implementing many of these improvement initiatives, and we believe that sustaining these initiatives over the long term and effectively implementing them will be the key to success. mr. chairman, this concludes my testimony and i would be glad to answer any questions that you or other members of the committee may have. >> thank you. we'll hold questions. we are going to now recognize mr. james stem, he represents the united transportation unions workers. we are very pleased to have him back and also look forward to his testimony. you are welcomed and recognize mr. stem.

>> thank you, mr. chairman and ranking member cummings. we appreciate the opportunity to testify. there are about 19,000 amtrak workers, and i today am bringing you their message. we represent about 3,300 career, professional amtrak employees. i would also like to revise my remarks by adding the fact that i had the personal opportunity to work in rail passenger service for railroad during the five years predating the creation of amtrak. i witnessed firsthand the decline of the equipment, the services that were there, the attempts by the railroads to get out of that business because it was -- the liability was a major concern, and it was a money losing prospect. i also had the opportunity to work on amtrak trains during the next 10 years following the

creation of amtrak, and was embarrassed to say for the equipment that amtrak inherited when they first started this process. so mr. boardman clearly identified that as a major issue. i would like to continue my remarks by pointing out that labor doesn't have expertise in business organizations. our members are normally on the other end of that. our interaction with amtrak has been very positive in the creation of that plan. we have had no complaints from the field about amtrak's reorganization. and we support this effort and commend amtrak in modernizing the operations. we also comment amtrak for applying modern technology in managing the resources that amtrak has and their personnel. now that amtrak is not operating from day to day in a survival mode, with constant threats to its very existence, we are

competent this well planned organization will focus amtrak's assets and workers in areas where the best improvements and service will happen. our amtrak members are part of the transportation team who operate trains, moving passengers to their destinations safely and on time. this activity requires simultaneous coordination with every aspect of operation from mechanical inspections and repairs to maintenance and repairs to tracks and signals, to the positioning and cleaning of the equipment, and dispatching of inner city and computer trains to multiple destinations in many directions. making changes in one area of operations is not a simple issue. because it also requires changes in other areas corresponding to ensure continuity. eliminating and consolidating layers of management responsibility in this organization plan, in our view,

is a very productive move. we are encouraged that amtrak made reductions in management last year and their new reorganization plan proposes to reassign even more management positions. amtrak should earn the support of congress for this upgrade and their organizational structure. amtrak operates with safety and customer service woven together as top priorities. our operating crews fully understand that safety comes first and on time performance is the goal. this positions amtrak to meet the demand for significant increases in rail passenger service. amtrak operating crews are among the most productive workers in this system. every amtrak employee should also be placed in a productive position that supports the needs of customer service and to manage growth of our operations. our members are ready and eager to work.

congress asks amtrak to share a plan on how to improve services and reduce the travel times between our major population centers. the next generation plan provides a road map for improvement and identifies the funding requirements. amtrak's ridership set a record last year as mr. cummings and mr. boardman indicated, and with an aging population, higher gasoline prices, and the total instability of the fuel resources, highway and aviation congestion, millions of more travelers will choose to ride the train if the service is available and dependable. amtrak workers are prepared and well trained to provide services to our customers, but for us to succeed, congress must provide amtrak with consistent and predictable multiyear funding for modernization and capacity

upgrades beyond reorganization what amtrak really needs is dramatic increases in capital investments. amtrak's next generation plan for the northeast corridor is outstanding. it will cut the transit time in half between washington and new york, as well as between new york and boston. capital spending to increase speeds and upgrade amtrak's infrastructure is the ticket to transporting americans in a cost-effective and energy efficient manner. we in labor are amtrak's partners. we urge this committee to allow amtrak the latitude to reorganize if they so see the need, but more importantly to authorize substantial amounts of additional funds for amtrak's capital needs. amtrak also plays a central role in financing our retirement system which is a self-funded pension system that this committee in 2000 and 2001 reformed.

changes in the federal treatment of amtrak such as significant funding cuts or passenger rail privatization could jeopardize the solvency of our railroad retirement system that affects 270,000 career railroad employees around the country. americans want a national inner city passenger network and amtrak is uniquely able to fill that need. highways and commercial aviation will not alone meet the nation's future transportation needs. the coordination of air and rail passenger services should be mandated to free more air slots and provide timely rail services for shorter travel distances in 300-mile ranges. a modern efficient inner city passenger rail system is the necessary part of a balanced transportation system. congress should recognize that inner city rail passenger service requires public subsidies, just as our airline

and bus partners also. many airline executives are on record today supporting the coordination of air and rail services to increase the capacity of the air points. i want to make sure this committee aware of our full support for the expansion of our freight rail capacity as well. amtrak and our freight railroads work together as partners, both have capacity needs that can be 3450u9ual goals. we support the expansion of amtrak services and understanding that this expansion also must address the capacity needs of our freight rail partners. i'll be happy to answer any questions. >> think you. thank you for your testimony. we share your commitment to making certain that amtrak employees and particularly those long serving or those -- are treated fairly moving forward.

also that we meet our obligations as far as commitments, retirement, pension benefits and other items. i think we've always advocated that. thank you for your leadership, mr. stem. representing labor, mr. boardman had said that it was eight years amtrak did not have a labor agreement in place. is that correct? i think you will recall at the time that i felt that that was uncalled for, but that was the case, wasn't it? >> yes. >> and that case with their brothers and sisters, union members, the freight systems, and that is why i tell government supported service such as amtrak should be held to a higher standard. the unions actually had to go to court to get relief. that is not the way to run a railroad or passenger rail

system. history in that regard speaks for itself. mr. boardman, you submitted -- when did you submit the five- year strategic plan? >> it was approved in october of 2011. >> i point out that i have the greatest respect for the opinion of the ranking member. sometimes the other side accuses me of micromanaging. i do not consider my role as micromanaging when in 2005, gao said they should have a strategic plan. in 2010, the i.g. also, didn't you also say they should have a strategic plan and there was not one? >> yes. >> for the record, in 2011, i think i became chairman that

year, mr. boardman did come forward with a strategic plan. i have november. sometimes our role is one of oversight, one of prodding, one of making sure that what should be in place -- i come from a business background. if this is a corporation which is subsidized heavily by public support, at the very least they can do is have a business plan. that should be flexible. let's take the inspector general's report and look of the implementation of strategic plan. let me preface my remarks by saying that there is no one who is a stronger supporter of passenger rail service in the united states than this guy right here. it is cost effective. i'm a fiscal conservative. you can move more people for less.

as far as the environment, energy, it is an absolute winner. we have to do it with the least amount of subsidy, and god forbid there should be a profit , we could achieve that if we work together. let's take the report together. the board of directors, in priia we have organizational problems from the top of the board. proceed in this hearing, i ask the question -- we went to a nine-member board. seven members of the board had been appointed. two democrat appointees were lacking. yesterday i am told that the white house submitted these two nominees. i am pleased to see that. i hope to spend it -- send it back with due speed. sometimes it takes a hearing to get action, whether it is

implementation of a strategic plan or highlighting that the board should be filled. maybe they did that of their own volition. i am pleased it was done. let's look at the key folks in place. do divided into six divisions. i am pleased to hear what you said about possibly not going forward with some of the commuter activities in the organization planned, at least from hiring additional personnel in that area. we also find that talking about ryder ship, mr. boardman, the highest percentage of increased in ryder ship is in state- supported routes. is that correct? >> yes. >> next year, according to priia, the states will have to step up to the plate and pay

full support. that is correct, mr. boardman? >> yes. >> under 209. that will help your bottom line pretty dramatically. it is about $100 million per year. is that correct? >> that is within the range. it is quoted in this article does it is important to help states make the case for amtrak so legislatures will invest in that. that is one reason we want to hold your feet to the fire to make your passenger rail service the cooperative effort with the state's attractive. looking forward to working with you. we have a change in that activity. we will have to see how that evolves.

>> the general managers, one of them is a vice president. that is the northeast corridor infrastructure, stephen gardner. >> he will be in here when we do the northeast corridor. i would love to have him. >> we will just subpoena him as a last act. >> i have to now wipe the smile off of joe mccue's face. >> he did not have a smile. >> we have moved forward in the business lines. the other piece of this, had i not been so long winded and other parts of what i said earlier, is the major part of this. -- matrix part of this. chief engineer, chief safety officer. they set the standards and the

budget necessary for the business line chiefs to carry out so you have not just the customer focus, but a bottom- line focus, and there is the expertise that is their necessary for us to make improvements in mechanical maintenance and improving safety and all the things that are needed to support these general managers to get their jobs done. some of them are filled, some of them are posted, and they will be finished off in this organization. >> i look at the areas in which we're losing money, or you may be losing some opportunities in providing some service. another area that the inspector general highlighted and has been of interest to the committee, we did a hearing on food service. you have addressed some changes in that, in improving some of

the controls. what was the recommendation, mr. alves, on consolidation of the two activities we are seeing in food service? >> part of the food service was provided. the commissary and food delivery function was overseen in the marketing department. what we found was that they were not coordinating fully. >> i am not micromanaging, but if you're losing $79 million on food service with a captive audience, three years ago, and that increases to $84.5 million this past year, you have a problem. yesterday i did not order anything on amtrak, so i save the taxpayers' money as far as

purchasing food. it is a problem. we want in the structural reorganization the recommendations, if it makes sense and can be effective, that are recommended by the general and implemented. -- implemented. let me address part of the report. it is talking about some of the amtrak services. it says, availability and reliability remain the same or declined slightly for the remainder of the amtrak's equipment compared with acela's ability. the bill -- availability of

objects equipment has stayed roughly the same compared with acela's reliability improvement, and the rest of amtrak's equipment is on average less reliable than before. that is a concern. >> we agree that it is getting older, and therefore it is becoming more unreliable. in some ways. we have ordered new electric locomotives on the northeast corridor to make substantial improvement. we think maintenance is an excellent way to go. it is helped is a lot with the acela fleet. that is our premium service. you want to maximize its use. if we use the same plan with the rest of the company right now in the same way, we're probably talking 600 to 700 more employees. we do not see the balance yet that we need to increase the

revenues necessary to pay for that, compared to where we are right now with the reliability. we really looked at that premium services differently, because the fares were so much higher in that process. >> i did not mention this before, but out of the report, just for the record, amtrak's food and beverage service has incurred a direct operating loss 5 under $26 million. that is not -- $526 million. that is not chump change. as recommended, the vice president of operations has agreed that amtrak will develop a five-year plan for reducing its direct operating losses. mr. boardman, can you shed some light on that?

>> it goes back to the entire structure of what we're trying to do in terms of accountability. one of the issues at amtrak early on was the lack of accountability, lack of understanding of what a budget was and the management of a budget that people had available to them. a lot of the strategic plan comes out in how you will measure the metrics, and what are your goals, how do you get organizational excellence, and what to look for in terms of maximizing revenue, optimizing our operating ratio, doing the normal business things that we need to get done and holding each one of those folks accountable to a performance measurement system personally in their operations to get that done. that is the structure that the vp for operations in the whole company will begin to really do. we saw early on, and i

complement ted for recommended the commissary, but that was something that we needed to change quite early. you have to operate the railroad while you are making these changes. to have to be prepared to make the change in a way that makes sense, and you have to have it tied in together to the rest of the structure. we did that. ted and i talked about that early on, those kinds of things need to happen. we're still doing that as we are finding ways to make those improvements. >> thank you. we will know that amtrak is now taking all credit cards, at least on the acela train i was on, which is something that you recommended. also, the advise you to get a receipt from the cafe to.

progress.king >> to mr. boardman, i want you to be real clear -- and i know you are, but i want you to make it real clear -- on both sides of the aisle, we want effectiveness and efficiency. it does no one any good, including the employees if we are not zero in on effectiveness -- zeroing in on effectiveness. let me go to this area. i want you to listen to me very carefully. when you tell me that in a year you were able to recover over $20 million in overpayments, i

have got to tell you that sense all kinds of whistles going on in my head. the first question is, why do we have the overpayments? the second question is, when you're talking about strategic plans and organization, there must be somebody who is responsible for making those overpayments. somebody in charge. what have we done to address that, how much is still out there? i can tell you what happens up here is that if somebody has got something against you, they will take stuff like that and do some damage. rightfully so. help me with this. talk about these overpayments, and -- as a strategic plan say

that we project we will have "x" amount of overpayments? we're talking about measurements, mr. boardman. does the plan say we will recover "x"? that means somebody has some money they're not supposed to have. that is money we could be using to address our issues here. >> i would like to provide some background on this issue. it had been a longstanding issue with amtrak, going back to when amtrak was formed. in this unit, which paid the invoices from host real rose for our operations over their tracks, there really was no billing review process. for years, the company relied on the inspector general to come in after the fact, years after the fact, and reconstruct the

payments and identify overpayments. in 2009 or so, we recommended that the basic business process that the company should have to review a bill before they pay it. the company agreed and it worked aggressively and hard to implement a billing review process. the second issue we had is that the billing review was in the same group that was structuring the agreements with the railroad, and we thought that was too close and it needed a separation of duties. we recommended that billing review process be separated from the group that is negotiating and working with the host railroads. the company agreed to that as well. it took a couple of years. these things to take time. for the company to put that structure in place, develop

processes and policies and work guides -- at this point, the function is in existence, and the group is reviewing railroad bills as a comment and before they are paid. we think that the problem -- >> your saying that you think we have stopped the hemorrhaging now we have to go backwards to see what we may have lost. is that a fair statement? >> we're finishing up the last of our railroad billing review audits. we have covered most of the large amounts of money that are out there. i think about the end of the year we will issue the final reports, and that point will turn everything over to the company. i'm not sure it is cost- effective at this point to go back five for 10 years and try to recover small amounts of money.

covering the bulk of our money in our reports. >> one quick thing. mr. boardman, you made a big deal. you spent a lot of your time talking about safety. i want to know what you mean by that. you were saying that when you went and tried to do your review you figured out that the thing was safety, what does that mean? >> it means that the system itself, if you do not have a safe transportation system, whether bus or aviation system, rail system, will not have customers because they will not trust the ability to get on the train and be safe. but to will not have accidents --

>> this is what i want to hear, right now. >> that you have well-trained employees, but they know what to do in an emergency, that we're capable of handling our passengers in a safe, efficient manner. >> passengers were worried about that? >> they could be, if we begin to have those kinds of problems. dollars there are those areas and pockets were that existed. it is also among employees -- there are those areas and pockets that existed. it is also among employees. >> go-ahead. >> mr. boardman, i'm going to ask fundamental question. a passenger rail line in this country profitable? >> the northeast corridor is profitable. >> now as a nation, if you add

on what amtrak does across the country, is it possible to be profitable in your view? >> not without a policy decision by congress, which is lacking here. >> what decision would that be it throat whether the congress believes -- >> be? >> whether the congress believes it is necessary. there needs to be a decision, just like there is a decision every day, but we're going to invest in the highway system or in the aviation system. for example, 50,000 employees of ono.t. of that are focused aviation and there is only 60,000 people in d.o.t. congress has to decide what it wants in passenger rail across the nation. >> passenger rail without

government subsidization -- >> even kerbside buses, without the subsidization of being able to pick up on the curb and not sustain all the overhead costs, not have to pay for the capital in the highways could not be profitable. they are now, unfortunately here in washington, we have moved into the terminals. there is no mode of passenger transportation, including aviation, that can be profitable only from the fierce. >> -- fares. >> that make sense to me. you said that amtrak needs to be run more like a profitable business. amtrak was set up 40 years ago to be a profitable business. it has taken us 40 years -- what did you mean by that? running more like a business and less like a government agency?

are there specific things that need to be done? when people always say that, we need to run government more like a business, that is a statement that can be made. but it seems like there is a lot of smart people the working on this issue and it is taking 40 years and we're still arguing over the same points. >> amtrak is a business. it is not a government agency and does not operate as a government. it operates as a business. >> it operates like a government because when we lose money, that does not matter. that just gets paid off by congress, right? >> amtrak relies on the government for its survival.

on the subsidy, both operating and capital subsidy. i think what is different now is that there is a focus within the company at the leadership level -- the board of directors and joe portman on making the company as efficient -- joe boardman as making the company has sufficient as possible. delineating customers and moving through lines of business and developing accountability mechanisms is really focused on the bottom line. i think that is what has been significantly missing in the past. a focus on running the trains. we can run the trains, but can we do it as efficiently as we possibly can? i think that is the new focus driven by the strategic plan and driven by the whole concept of organizing around lines of

business and holding people accountable for achieving a goal. that goal is in the future going to be much more focused on the bottom line. >> thank you for that. from a congressional standpoint, there should be some financial pressures on amtrak from congress. otherwise, we would never have any of the things that you all are trying to do, streamline the operation. the impression that we should always open and dudley fun things or increase funding -- open-endedly fund things or increase funding without some degree of financial pressure for efficiency, safety, and other things is something that we need to avoid.

obviously congress wants to make sure you have the amount of money that you need to run your organization, but there needs to be some financial pressure on an organization to be more efficient. it sounds like what you are doing is totally going to be very successful. thank you. i yield back. >> the gentleman yields back. mrs. norton? >> this is a question for mr. alves. in your inspector general's report, there is a troubling section on human capital management. you have found, i am quoting you now, only limited progress in implementing your recommendations. the most troubling part -- sentence says, in addition amtrak was increasingly at risk of encountering skilled

shortages, as highly experienced, longtime employees retire. first i want to know where the gaps are, when you're talking about safety and risk. and then i have to ask mr. boardman, what is so difficult about creating training programs for employees that are already at amtrak, perhaps, so that people who are already trained can train to the next level and replace those who are retiring? i need to know more about the skill shortage risk, how serious it is. as people experience -- as there

is some downsizing, from congress for example, you may find more people retiring. can i have a response on that? >> what we found was that amtrak human capital management was very focused on transaction-type things, making the payroll this month. processing the payroll. adjusting people's job description. i wasn't really looking at strategic issues. industry and running it like a business has evolved over the last 20 years. human capital management is considered a strategic issue that drives performance in the company. we issued a report, and it did not get a lot of traction in the company. we did a follow-up and mr.

boardman reacted positively and made it a priority. the idea of people losing skills is fairly common. it is a concern now throughout the country. older employees are retiring. you have to have new people coming and. the have to be the right people hired. they have to be trained. they have to be properly rewarded. there wasn't a strategic focus on those issues at amtrak. since mr. boardman made that a priority, we have a new human capital officer. the one thing that mr. boardman directed him was that within three months, he wanted a plan to address those strategic issues.

that plan was delivered. there has been a lot of work on it. we meet periodically and get briefed on the progress, and i think things are underway to correct those deficiencies. >> it is really not all that hard. the problem is that everything is a priority. it is a priority to resolve union issues and have labor contracts. it is a priority to have internal controls. it is a priority to replace equipment. we did not have a fleet plan in place until now. >> i will stop before a second. yours is a labor censored business. we are not talking necessarily about brand new people who would have to be trade.

you have got people that -- surely there is a job ladder in your business. my question is very specific. and that is about training, as mentioned in the report. much of which would probably have been done on the job anyway if you are dealing with your own employees who want to move up. why are there such training programs in place, or are such training programs planned before you have the wholesale exodus of trade employees from amtrak? >> we're training. what you have read is old news. the inspector general was relating to that. we've got a major change in how we manage human capital. we have a regular training program that improves operating services. >> including training people to move into spots that will be vacated by retirement? >> they're not all in place yet.

>> i just want to know your plan. that would be training -- for people on the job might move up and throw there will be succession plans -- >> up? >> there will be succession plans. >> especially in light of my next question. you could see retirement the likes you have not plans for. i certainly did not mean you. >> i am going to be 65. >> you better start planning right away. of the light of the fact that

your business cannot proceed without trained people without putting those of us aboard your trained at risk and you visit your priorities, i realize we are important given the fact that you are the have a very well-trained workforce. you do not have the kinds of accidents every other day. we would like to keep it that way and then prove it. i am only asking the training of people on board. i do have to ask about your reorganization. i understand the transparency. amtrak received about a billion

and a half in federal funds and about half a million of that was even for operations. the budget control act had $160 million cut in it. it could be worse. if we do not go over the cliff, this could be even deeper cuts. we fit in tried to reconcile the differences among us. what does this cut in peril any of your plans? does your strategic plan take into account that you are likely to see cuts rather than increases over the next several years? >> we are making improvements in

efficiency by using efficiencies. we have had the ability to have a voluntary retirement programs. we have tried to place them other places. >> it does not mean you shed the very skilled part of the workforce. >> we are in the non-agreement areas. we are not the labor force. they were all in the management area. when there was a need, it was not just moving the commissary over to the efficient side of thing. it is what is marketing really doing very?

these kinds of things we are looking at as well. the kinds of changes we are making to help in that area. >> if you could indulge me. you know that i have been particularly complementary of your plan, your plan to do these. it is a very 21st central plan. the strategic plan takes into account an overhaul of union station and of its operations for high-speed rail. >> id does. on the infrastructure and

investment developments, what we really looked at is what is one of the most important assets in the united states? that is the northeast corridor. i would like to move it on to richmond and south. this has realistic potential. it supports 40 million people within 40 miles of the corridor. it needs to change how it was done. you say many vendors are there providing spaces that all used to be dedicated to passengers. we need to recreate this. they are coming. the highest speed rail will be coming whether we are talented enough to make it happen.

someone will make it happen for the future. it is the most important way to move people through such a dense corridor. >> thank you very much. >> thank you. >> there is no one on our side. i have a couple of questions. it is a pleasure to see you. knowing that you are from rome, congratulations on your reelection. >> thank you. >> you mentioned the benchmarks which require accountability. what does that mean in the real world? >> what i was saying is it is not so much that the plan has

the benchmarks and accountability. it is that this entire process should lead to that. the company is not at a place where people are being appropriately held accountable for. >> would you say that is that it is difficult for difficult to make down. they have no vested interest in outcomes. what would you imagine this looks like? >> i will take a shot at it. the would be able to insert it much more. amtrak has established 2 key metrics. this is how our revenue compares

to our expenses. our operating ratio is less than one. the goal is to bring it up. the second incorporates capital into that. these are really excellent goals. the accountability part is that everybody has a role to play. their role is aimed at accomplishing amtrak goals and contributing to those metrics. they are measured against how well they contribute against bet metric. there is a much more important focus on the bottom line. we are in the very early stages.

it declined to take a while for the change to take place. >> it is difficult to define. >> and may be difficult but it needs to be done. >> i do not athink it is so difficult. one of the things that is important here, and i think ted talked about it, is the total operating expense over total operating revenue. what we're looking for are the general managers to really understand how much revenue is coming in and what their cost is. we had a history. we know what these numbers are. we have a performance plan for every specific individual. we're calling in the spark program. you have to have an acronym to

talk about that. the goals need to be specific. they need to be measurable. they need to be achievable. they need to bhad a date on in that provides this. it will be in proving as the move forward. humans need this time to really estimate what it is that we want them to do and what we need to do to protect. we have had very weak internal controls. we have had a weak business process. for years it has been a survival mode. are we going to survive into next year deck? has begun to change at amtrak i

hope. the changes that are coming about i think are very business related. >> i'm not going to send you a bill because you actually look at them. >> part of the difficulty here is understanding the number of transactions along the route of the trading each day, which is part of what ted was talking about, whether a train was late at a certain location was not and whether there was an incentive pay to the railroad. >> you can understand some of the cynicism that comes out. especially knowing that aviation is subsidized by little over $4. the inner city bus is a dying. amtrak in total time is a little

over $46. this is a substantial subsidy. and want to ask you if anything to add. our mayor, i was listening to mrs. norton. he had appointed me a commission here recently to try to address the issue of the baltimore station. >> what i will do is give you a written response. i'm not really up to speed. >> i am not worry about you being up to speed. i want you to know a it on the radar.

we are very concerned. baltimore is a major city. the train station is one we are not happy about. we want people to feel a sense of vitality in our city. we have a mayor here is doing a great job. that train station is very .entral perid >> i was looking at the second floor there. they had the power director's office on the top floor. take for us to be potentially using that differently? we are there. we're looking at it. i do not have specifics of our plan. >> i like to setup a meeting

with your people. it is something that concerns us greatly. we want to know where amtrak is fitting up there and what your plans are. >> to other members have questions that caller: caller: -- any other members have questions/ >> toughly this will be constructed to make certain things move forward in a positive fashion. taxpayers have a huge amount of interest.

we have subsidized the amtrak operation. almost all public transportation is subsidized in some fashion. we can lessen that. others have the opportunity to move forward the strategic plan prior to becoming chairman. it is happening. we wanted to be constructed and executed so that we had in place the very best practices. it can be flexible to market

requirements to a customer demand and make sure our employees are adequately rewarded. this is a high-speed program which has been advocated by the administration. this will conclude the series. they said it was a shame that the united states appears to be falling further behind.

we will examine very carefully the progress that is being made. i think the gentle lady from california said that the speed maybe at 86. some of somewhere between 83 and 86. this is not acceptable. the purpose of the hearing again

is to not only deal with the consumer but also of the taxpayers cannot been honed during thanksgiving. i saw hundreds of thousands of americans working so hard to pay their bills, raise their families, be responsible citizens. they spent a large portion of their sweat and tears to washington. we have to the trustees of their hard earned dollars. that is what we intend to do until the very last hearing. with that, if there are no more members region if there are no other questions from members, let me ask unanimous consent

that this remain open to such time as the witnesses have provided questions that may be submitted to them and writing. we will give it two weeks with consent of the other side of the aisle. i ask unanimous consent that the record remain open for the additional comments. they can be included. objection, so ordered. thank you for your fine efforts today. thank you so much. this hearing is adjourned.

thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> tonight, the memorial service for warren rudman. join as endicott p.m. eastern here on c-span. later, hillary clinton's keynote address on u.s./israel relations. this is at 10:10 p.m. eastern also here on c-span. in his weekly address, president obama talks about u.s. tax policy, the tax cut put in place at the it illustration that will expire at the end of this year. -- by the past administration that will expire at the end of

this year. be on some important decisions that will have a real impact on our businesses -- and on families like yours. the most pressing decision has to do with your taxes. see, at the end of the year, middle-class tax cuts are set to expire. and there are two things that can happen. first, if congress does nothing, every family will see their income taxes automatically go up at the beginning of next year. a typical middle class family of four will see their income taxes rise by $2,200.

we can't let that happen. our families can't afford it, and neither can our economy. the second option is better. right now, congress can pass a law that would prevent a tax hike on the first $250,000 of everybody's income. everybody. that means that 98% of americans and 97% of small businesses wouldn't see their income taxes go up at all. and even the wealthiest americans would get a tax cut on the first $250,000 of their incomes. congress can do that right now. they can give families like yours a sense of security going into the new year. they can give companies like this one some certainty about what to expect down the road. and with the issue behind us, we'll have more time to work out a plan to bring down our deficits in a balanced way -- including by asking the wealthiest americans to pay a little more, so we can still invest in the things that make our nation strong, like education and research. so let's begin by doing what we all agree on.

both parties say we should keep middle-class taxes low. the senate has already passed a bill to keep income taxes from going up on middle-class families. democrats in the house are ready to do the same thing. and if we can just get a few house republicans on board, i'll sign this bill as soon as congress sends it my way. but it's unacceptable for some republicans in congress to hold middle class tax cuts hostage simply because they refuse to let tax rates go up on the wealthiest americans. and if you agree with me, then i could use your help. let your congressman know what $2,000 means to you. give them a call. write them an email.

or tweet them using the hashtag "my2k." that's my2k. you and your family have a lot riding on the outcome of this debate. we all do. and as citizens, we all have a say in the country we want to build - not just on election day, but every day. so make your voice heard. i promise, it makes a difference. thanks, and have a great weekend. >> hi, i am senator orrin hatch from the great state of utah. another year is set to begin. this holiday season is different. as the clock ticks down to the new year, almost every single american is facing the prospect of the fiscal cliff. if we do that act by the end of the year, 28 million families and individuals will be forced to pay the alternative minimum tax. the average middle-class family will see their taxes go up by at least $2,000. economically, if we do not act our nation will fall into it and other painful recession pushing unemployment back up over 9% and putting seniors' retirements at risk.

the president said he once a so- called balanced approach to solve this crisis. what he proposed this week was a classic bait and switch on the american people. a tax increase double the size of what he campaigned on. maybe i missed it, but i do not recall him asking for any of that during the presidential campaign. these ideas are so radical, they have already been rejected on a bipartisan basis from congress. the president has an obligation to steer us away from the fiscal cliff and to tackle our $16 trillion debt that is driven by runaway entitlement programs. we have seen an utter lack of leadership from president obama and his allies on the left have shown very little to no willingness to tackle real structural entitlement reform.

there is no manner of tax hike that can save medicare or medicaid. these programs can only be fixed with real reforms. some on the left say tinkering around the edges of medicare and medicaid would be enough, or that the healthcare law is entitlement reform. they argue we do not need to examine the structural problems. make no mistake about it. shoring up medicare and medicaid will not be easy. the situation has become so severe, it is the only responsible course to take. in just over a decade medicare will be bankrupt. medicare beneficiaries receive $3 in benefits for every $1 they pay into the system.

that is while 10,000 more americans join this program every day. the number of workers supporting it has declined by over 18% over the last decade. the average family could give up its salary for the entire year, sell their house, and still not have enough to pay their share to secure medicare. unfortunately, some on the other side of the aisle are advocating a disastrous strategy that would take us over the cliff putting millions of middle-class families, small businesses, and a weak economy into further jeopardy. they want more and more tax dollars to spend without putting in place any meaningful

and responsible reforms to the biggest government programs on the books. that just does not make sense especially when you consider if the president has his way it by raising the marginal tax rate, nearly a million businesses and 700,000 jobs would be at risk. he would be willing to put 700,000 jobs at risk? this is a strange turn of events considering in 2010 the president and 40 senate democrats supported extending these tax rates citing our sluggish economy. we should not raise these taxes, but we should enact comprehensive tax reform that will generate more revenue, create jobs, and increase our gdp by as much as 3.5%. we should find a solution to ensure the survival of the medicare program. we will never get there with the un-serious plan the president proposed this week.

the longer the white house wait to get serious is a day closer going over the fiscal cliff and the harder it will be to find a solution. americans want washington to work together, to get our country back on track, and to ensure we leave it a better place than we found it for future generations. let's make the hard decisions. let's make those decisions we know must be made. thank you for listening. >> coming up, "the communicators" looks at privacy and communication. the condoleezza rice talks about education reform and cyber security. then the memorial service for then the memorial service for warren